Mains Q & A 4 February 2023
Q1. Because they increase productivity, agglomeration industries have been studied in the literature as engines of economic expansion. Describe corporate agglomeration’s reasons in further depth. (250 words)
Paper & Topic: GS I Location of Industries
Model Answer:
Introduction:
Businesses that depend on bulky, heavy, and inexpensive raw materials (ores), such as those in the steel, sugar, and cement industries, are located close to the sources of such resources. Many industries benefit from being close to a leading industry and other industries. These benefits are known as agglomeration economies.
Body:
Agglomeration Economies as Engines of Economic Growth:
The benefits of concentrating housing and economic activity in particular locations are referred to as agglomeration economies, sometimes known as external economies of scale. All businesses can benefit from a number of factors when a region focuses on producing a particular kind of good, including:
Reliable supply networks.
Infrastructure built specifically for the sector that provides skilled labour.
Good connections to transit.
People and businesses commonly congregate in certain areas due to agglomeration economies. For instance, people commonly move to places where there are more job prospects, social chances, and specialised services.
Examples of agglomeration economies:
Silicon Valley. IT sets usually cluster in similar geographical areas, like Silicon Valley in California, and big cities, like London. This is due to the fact that these locations attract highly skilled IT workers because it is easier to get qualified people there. The auxiliary infrastructure will encircle the regions as well. Market competition will exist for designers, software engineers, and proofreaders.
Chinese manufacturers of clothing and textiles. Along the southeast coast, China’s industrial industry has experienced substantial growth. These locations have good transportation connections for exporting to the rest of the world. Additionally, migration movements from northern China have attracted people to the regions, which helps to keep labour prices low.
The industrial industries in India are concentrated due to the following reasons:
The most crucial consideration when selecting an industrial location is the cost.
Cost of bringing raw materials on-site: Manufacturing operations are often conducted in areas where all required raw materials are either already present or can be more easily arranged.
The cost of production on-site depends on the amount of labour, money, and other resources that are available. Therefore, the location of industries is affected by the costs and accessibility of key production inputs.
Manufacturing and distribution expenses: The distance between a market and an industry has an impact on transportation costs. The cost of transportation affects the price of output distribution.
In actuality, the location of industrial firms is periodically determined only by the availability of raw materials.
The finished product of one industry may very well be used as the raw material for another. For instance, the pig iron produced by the smelting business is used as a raw material by the steel industry.
Power:
Industries must be localised, which necessitates a consistent electricity supply. Coal, mineral oil, and hydroelectricity are the three most significant conventional sources of power.
The iron and steel industry, which principally depends on enormous quantities of coking coal as a source of energy, is frequently associated with coal fields.
Transport:
Transport, whether by land or water, is necessary for both the assembly of raw materials and the selling of finished commodities.
Railways were built in India to link port towns with the countryside, which fueled a number of industries in the areas around Kolkata, Mumbai, and Chennai.
Market:
The entire production process is useless before the finished goods are put on the market for sale. The proximity to the market affects how soon manufactured goods can be disposed of.
It enables consumers to buy items at lower prices and helps to reduce transportation costs.
Water:
Water is yet another essential requirement for companies. As a result, numerous industries are constructed close to lakes, canals, and rivers.
The iron and steel, textile, and chemical industries all require a lot of water to function correctly.
Site:
Site requirements are crucial for the expansion of industry. Typically, sites should be flat and well-served by dependable transportation options.
Climate:
The environment in a place has a big impact on how industries develop there.
In hostile conditions, it is difficult to build industries. Climates that are too hot, muggy, dry, or cold cannot support industrial development.
Capital:
Modern industries are capital-intensive and require substantial investments. Entrepreneurs are available in urban areas.
Large cities like Mumbai, Kolkata, Delhi, and Chennai are key industrial hubs since these are where the great capitalists live.
All of the major manufacturing plants are getting ready to increase their capacity.
Administrative Procedures:
Government planning for the distribution of industries in the future, for reducing regional disparities, for eradicating air and water pollution, and for preventing their dense concentration in large cities has not become any less significant as a locational determinant.
A public procurement strategy has been devised that integrates technology and shared facility centres, while the Khadi Mark steps have been adopted to promote Micro Small and Medium Enterprises.
Financial Resources:
The daily exchange of billions of rupees required for industry establishment is only possible through financial services. Therefore, areas with more financial facilities are better suitable for the building of industries.
Insurance:
Man and equipment damage is a regular concern in sectors where insurance facilities are sorely needed.
Conclusion:
Policies that come in the form of tax benefits, dependable laws, cheap land, easy administration, and solid governance help industrial clusters emerge. As a result, the GOI passed the Special Economic Zones Act in 2005. Additionally, in order to increase manufacturing’s contribution to the country’s GDP from 16 to 25 percent by 2022, the government has established National Investment and Manufacturing Zones. Governments use “regional policies” to promote “balanced” economic development and thereby build industries in specific places.
Q2. The cooperative concept builds on the notion that communities developing infrastructure with local resources and family labour is a fundamental component of inclusive development. Elaborate. (250 words)
Paper & Topic: GS II Social Sector
Model Answer:
Introduction:
A cooperative is an autonomous collection of individuals who have voluntarily joined forces to solve their common needs and goals in the economic, social, and cultural spheres through a jointly owned and democratically run business. The needs of the participants and the broader interests of the community strike a balance with the desire for profitability.
Body:
Background:
India, an agricultural country, founded the largest cooperative movement in history.
Amul is one such business; it collaborates with 28 state marketing federations, 1,85,903 dairy cooperatives, 222 district cooperative milk unions, and 16 million milk producers.
When 36 lakh female dairy producers work together openly, Amul is a shining example of what they can achieve.
More than 8 lakh cooperatives of all sizes and varieties exist in India.
The Union government of India formed a new Ministry of Cooperation in July 2021 to strengthen the cooperative movement.
It was created in order to revitalise the cooperative movement and achieve “Sahakar se Samriddhi” (Prosperity via Cooperation).
Cooperatives are a crucial component of inclusive development:
Self-help economic companies known as cooperatives are crucial for enhancing the socioeconomic conditions of both their members and the community in which they operate.
Locally established, people-centered cooperatives have worked as catalysts for organising and social cohesiveness.
The foundation of social cooperatives is the idea that communities build infrastructure using local resources and family labour.
These might involve keeping up the community tank, paving the community road (either with or without MGNREGA), finishing the last mile of a canal system, or even keeping an eye on the contractor.
Particularly pertinent in India is a cooperative-based economic growth model where each participant works with a sense of responsibility.
It is a group for the uneducated, unemployable, and underprivileged in India.
When the public and private sectors haven’t been able to do much, it provides agricultural financing and finances, significantly aiding small and marginal farmers.
Cooperatives promote economies of scale and scope, enhancing members’ bargaining power to get benefits like higher wages and social security.
The opportunity, security, and empowerment provided by cooperatives allow its members to escape exploitation and poverty.
It minimises social rifts and resolves class conflicts.
It encourages the growth of small and cottage enterprises, a major employer in India.
Cooperatives promote gender equality by offering women more opportunities to participate in local economies and cultures.
Cooperatives, among other things, make ensuring that people live healthy lives by creating the framework for delivering healthcare services, financing healthcare, and providing HIV/AIDS positive individuals with home-based healthcare.
In order to make up for the limitations of both the public and commercial sectors, cooperatives are increasingly emerging as key participants in promoting access to clean water and sanitation services. Cooperatives are increasingly involved in the direct delivery of high-quality education by establishing their own schools, allowing students to attend secondary school in far-flung locations.
Moving ahead/Conclusion:
The cooperative movement’s guiding premise is to protect anonymity while bringing everyone together. The cooperative movement has the ability to address issues that affect individuals.
The pandemic seems to have increased the significance of community effort.
In order to address the urgent problems of reducing vaccination reluctance, feeding people who are waiting outside hospitals, and, most importantly, caring for orphaned children, the cooperative approach is urgently required.
putting the Vaidyanathan committee’s suggestions for credit cooperative societies into practise.
Beyond cooperatives in agriculture, milk, credit, and housing, cooperatives must broaden the scope of the agenda.
Cooperative organisations can play a vital role in educating people about the new fields and technologies that are emerging as a result of technological development.
There has to be an increase in the number of female-led cooperatives.
Cooperative irregularities must be curbed, and better enforcement of existing rules is urgently required.
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